Greece: Financial System Stability Assessment

This paper highlights Greece’s Financial System Stability Assessment. Greece met the shock from the war in the Middle East with strengthened fiscal sustainability and financial stability. The Greek financial sector has benefitted from the improved macroeconomic and fiscal environment and upgraded sovereign outlook. Short-term financial stability risks in Greece were found to be low prior to the war in the Middle East and remain manageable. Banks demonstrate strong resilience under stress testing with low risk of disruption from new entrants. Authorities should work to codify best practices and promote a deeper and more diversified financial sector. While the insolvency and creditor rights’ regime has been strengthened, more streamlining and a stronger judiciary process are needed. The supervision of credit servicers should be enhanced. Authorities should augment resources to deal with legacy issues and emerging risks such as cyber. Interagency cooperation should be strengthened and formalized in both financial stability and crisis matters. Emergency Liquidity Assistance arrangements need to be improved, and the deposit insurance fund enhanced.